Nike adds nearly $2 billion to Oregon economy
February 14, 2005
Beaverton, OR (14 February, 2005) – NIKE, Inc. today, in conjunction with Oregon Statehood Day, released the results of a commissioned economic impact study of the company’s operations within the state. According to the study, conducted by ECONorthwest, a Portland-based consulting firm, Nike’s Oregon activities account for 16,580 full- and part-time, direct and indirect Oregon jobs and add nearly $2 billion to the state economy. The only Fortune 500 company headquartered in Oregon, Nike reported global revenues for fiscal year 2004, ended May 31, 2004, of $12.3 billion.
Nike’s expenditures of $1.15 billion on its Oregon full-time and part-time employees, contract service providers and vendors; its investments in its Oregon facilities; its tax payments to governments, and its contributions to Oregon charities represent nine cents of every dollar of Nike’s worldwide revenues. This spending has a multiplier effect throughout the state, resulting in nearly $2 billion in economic activity in Oregon.
In addition to generating its own economic activity, Nike spurs activity in other businesses and by persons not employed directly by the company. Nike employs approximately 6,100 people full- and part-time. In addition it engages about 1,000 contract service personnel. Spending by Nike, its employees, and its contract personnel is associated, directly and indirectly, with approximately 16,580 full- and part-time jobs in Oregon.
Nike’s employment has also grown in the face of declining Oregon employment. From FY2001 to October 2004, Nike’s Oregon full- and part-time employment grew by 14.4 percent. During the same period, Oregon employment declined by 1.2 percent. The report also concluded that Nike provided an average base salary that was nearly 60 percent greater than the Portland Area average.
“This study clearly outlines that without Nike’s presence in Oregon, the economic profile of our state and the Northwest region would look dramatically different,” said Dr. Eric Fruits, senior researcher at ECONorthwest and co-author of the study. “Nike’s role as a key economic engine for the state touches Oregonians from Coos Bay to Portland to Eugene.”
Also according to the study, Nike and its full- and part-time employees in fiscal year 2004 paid approximately $84 million in taxes to the State of Oregon, local governments and school districts. As expenditures associated with Nike and its full-and part-time employees were $37 million in fiscal year 2004, the difference—approximately $47 million—was used to subsidize services provided to other residents and businesses in Oregon, including areas of the state that are not otherwise affected by Nike’s Oregon activities or employment. In addition, taxes paid by Nike and its full- and part-time employees exceeded the costs of educating employees’ children by more than $12 million.
The report also indicated that Nike invested nearly $70 million a year over the past five years to expand and maintain its Oregon facilities. In fiscal year 2004, Nike’s estimated capital expenditures in Oregon totaled over $93.1 million, including office improvements, purchases of computer equipment and software, and miscellaneous other capital projects.
Nike, the Nike Foundation, and its employees contributed nearly $25 million to Oregon charities over the last five years. In fiscal year 2004, Nike and its employees donated more than $5 million to Oregon nonprofits. Nike full- and part-time employees donated $1 million to charities, which the company matched dollar-for-dollar. In that same year, Nike employees in Oregon donated more than 56,900 hours of volunteer time to local charitable organizations, which Nike matched at $10 per hour. In addition to these contributions, many employees also donate cash, goods, and time outside of Nike’s matching gift program. More than 20 Nike senior leaders serve on non-profit boards in Oregon.
“In 1964, when Coach Bill Bowerman and I shook hands and each invested $500 to begin Nike, our goal was to build a company to help athletes achieve their personal bests and do so in Oregon, the place we both called home,” said Phil Knight, Founder and Chairman of Nike. “Nike has become successful because of the contributions of many hard-working Oregonians who invested their time, money and intellect in building this great global company that has an even brighter future.”
Nike retained ECONorthwest in October 2004 to evaluate the impact of Nike’s Oregon activities on the State of Oregon and the Oregon communities in which Nike has facilities and many of its employees live. Key findings for the study were based upon Nike’s employment (number of people employed), output (the value of goods and services produced), and income (the amount paid to employees and business owners). The study then utilized an input-output model to trace Nike’s purchases of goods, services, and labor to estimate the total amount of economic activity attributable to Nike’s operations.
The analysis was divided into two broad categories:
Economic Impacts: the effects of Nike’s Oregon activities on employment, incomes, and output in the State and local economies; and
Fiscal impacts: the revenues that the State and local governments and school districts receive from Nike and its employees and costs of providing government services to Nike and its employees.
About Nike NIKE, Inc. based in Beaverton, Oregon is the world's leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. Wholly owned Nike subsidiaries include Converse Inc., which designs, markets and distributes athletic footwear, apparel and accessories; Bauer NIKE Hockey Inc., a leading designer and distributor of hockey equipment; Cole Haan, a leading designer and marketer of luxury shoes, handbags, accessories and coats; Hurley International LLC, which designs, markets and distributes action sports and youth lifestyle footwear, apparel and accessories and Exeter Brands Group LLC, which designs and markets athletic footwear and apparel for the value retail channel.
ECONorthwest ECONorthwest is the Northwest's largest economic consulting firm, with offices in Portland and Eugene, Oregon; Seattle, Washington; and Boulder, Colorado. The firm has worked on a wide range of projects for public and private clients in economics, finance, planning and litigation support. ECONorthwest has published numerous economic and fiscal impact studies for companies such as Farmers Insurance, US Bank, Intel, and Weyerhaeuser as well as governments and agencies and interest groups. ECONorthwest has developed a nationwide reputation for objective and thorough research and its economists have served on the Governor's Council of Economic Advisors, the Oregon Investment Council, and the Chalkboard Project and have testified before federal, state, and local governments and agencies. For more information visit www.econw.com.